COMMON MYTHS ABOUT WHAT TO DO IF YOU CANNOT MAKE YOUR MORTGAGE PAYMENTS:

 

1.       Even if I stop making my payments, I can stay in the home for 12 – 18 months. 

 

Not anymore!  Banks are aggressively pursuing defaults in a much shorter timeframe. SEE FORECLOSURE TIMELINE.

 

2.        I’m better off walking from my home instead of trying to short sale. 

 

This is NOT TRUE.  Banks want to work with you on a short sale versus the home going to foreclosure.  And, there are some differences in credit impact for one versus the other. SEE SHORT SALES VERSUS Foreclosures.

Note:  Each situation is different, so please consult with experts before you make any decisions.

 

3.       If nothing else works, I can always claim bankruptcy. 

 

Be careful.  Bankruptcy requirements have been tightened considerably in the last 3 years.  Get EDUCATED on the requirements for Bankruptcy.

  

4.       Since I am not making my mortgage payments, I should also stop making my HOA payments. 

 

Please don’t!  The HOA can and will put a lien on your property, which will further complicate any workout solution with your lender, especially with a short sale!!! .

 

5.       If my divorce absolves me of any obligation for my home, then I am not financially obligated on my mortgage anymore. 

 

Not as far as the bank is concerned!  If you are on the Security Deed, you are absolutely financially liable for the mortgage. The only way to remove someone from the Security Deed is to REFINANCE.

 

6.       Deed in lieu is my easiest course of action. 

 

Many banks don’t consider a deed in lieu much different from a foreclosure.  You may be better trying a short sale.

 

 COMMON MYTHS ABOUT LOAD MODIFICATIONS

 

1.       With a loan modification, the bank will reduce my loan balance and my interest rate, and my credit won’t be hurt.  

 

Not necessarily.  Loan modifications are complex negotiations with your lender.  Before you consider going forward with this lengthy process, ask yourself (and the lender) the following questions:

a.       Is my loan balance being reduced

b.      Is my interest rate being reduced permanently

c.       Is my problem short term or am I just prolonging the “pain”

d.      Is it mandatory that I remain in my home?

e.      How much debt do I have? 

There are many issues and restrictions on debt-to-income ratios with loan modifications.  Hard to believe, but the very fact that you cannot make your current mortgage payment may actually be the reason why the loan modification is DENIED.

 

The two largest reasons for loan modification denial are:   debt-to-income ratios and…not having the appropriate paperwork to the lender by their deadlines!

 

    2.       If I am already behind in my payments, Loan modification protects me from foreclosure

 

While you are qualifying for a loan modification, the bank should stay your foreclosure, however, you need to validate that every time you talk to them.  The foreclosure process will continue while you try to work out the loan modification, so...  BE CAREFUL: If your loan modification is denied, you may face immediate expediting of the foreclosure process. Click here to see how fast the Georgia Foreclosure Process can be.

  

3.       My  Single Point of Contact will protect me from trouble.  

 

While the bank will provide you with a single point of contact, you can actually talk to anyone in the department and get an update.  If you wait for a call back from your “SPOC”, or play phone tag with them, the clock is still ticking.  Don’t delay getting updated information. If you get the SPOC voice mail, Press “0” and get to the next available person.

 

4.       For Loan Modifications and Short Sales, I must be late on my mortgage payments.

 

Not necessarily.  There are numerous variables in determining this.  For confidential information on your situation, call me

 

 

COMMON MYTHS ABOUT WALKING FROM YOUR HOME
(i.e. FORECLOSURE):

 

1.      If I let my home foreclose, it will totally wipe out my second mortgage. 

 

Not in Georgia!  Georgia is a Non-Debt-Forgiveness state.  Regardless of the fact that the second lien will be “wiped out” during foreclosure, your financial obligations will not be!  Your second mortgage lender can decide to sue you for the amount owed.

  

2.       I can pay someone who will guarantee they will get my foreclosure cancelled.

 

There is no guarantee that your foreclosure can be stopped.  Before you commit to paying any upfront fees, call the foreclosure attorney directly, and ask them if what you are being told is true.

 

3.       I have plenty of time once I get the default notice.  The bank is just playing hardball with me.

 

     When you get a default notice, it is a serious matter, and no one is playing with you.  Your lender is planning on foreclosure unless you do something…immediately.

 

 COMMON MYTHS ABOUT SHORT SALES

 

1.       Unless I am unemployed, I cannot apply for a short sale. 

Not true – many people have had their income reduced, but still have a job

 

2.       I have 401k money and I am afraid if I short sell, they will take my retirement savings. 

The bank cannot touch your retirement savings.

 

3.       If I need to move for a job, I can’t short sale my home.

Quite the contrary. Having to leave your home to get gainful employement is a hardship, and the lender will work with you to short sale your home.

 

4.       If I have two mortgages, then I can’t short sale.

Not true. There are, however, certain issues that you should be aware of as a part of short selling with two mortgages.

  

5.       The Bank will not pay real estate commissions on short sales

The bank will pay real estate commissions and all closing costs if you short sale.

 

6.       Any real estate agent can do a short sale.

Any real estate agent can list a short sale, BUT  the complexity of the transaction and the processes required are not for the faint of heart or the INEXPERIENCED Real Estate Agent.  Ask for proof that the Agent who lists your home has a history of SUCCESSFUL SHORT SALE LISTINGS.

 

7.       I need to move out of my house to be able to do a short sale

Quite the contrary.  Do not move out of your house.  The bank will consider your home abandoned and could deny you some of the options available to you if this is your primary residence.

 

8.       Investors can’t short sale

In most cases, yes they can.

  

9.       Unless I lose my job, I can’t ask for help from the bank

Not true.  Reduction in income, divorce, illness, and many other hardship circumstances will still allow you to qualify for help from your lender.